What will change in the remuneration of civil servants from January 1?

From 2024, the Cabinet of Ministers intends to introduce a new model of remuneration for civil servants. It provides for an increase in the value of official salary and a reduction in bonuses. The initiative will help establish fairness in the payment of remuneration to officials, but is unlikely to increase the prestige of the civil service, say those interviewed

The Ministry of Finance, with the support of the government, initiated the introduction of a new grade system of official salaries in government bodies starting in 2024.

What is grading

Grading means grouping positions according to certain criteria to standardize wages. The grading remuneration system takes into account the employee’s qualifications, experience, responsibility, complexity of work, etc. Its main goal is to make remuneration transparent by increasing the importance of salary over bonuses.

“Starting from January 1, 2024, it is planned to introduce a new model of remuneration for civil servants based on the classification of civil service positions, which, in particular, will provide for strengthening the role of official salary, reducing the variable component of remuneration, introducing a graded system of official salaries... State policy on remuneration for the civil service will be aimed at strengthening the human resources potential of the civil service, increasing transparency, fairness and predictability of wages,” the Ministry of Finance said in response to a request

The Ministry of Finance also added that the reform of the remuneration system for civil servants “is an important element of the negotiation process on Ukraine’s accession to the EU.” The Rada adopted the corresponding draft law No. 8222 developed by the National Agency for Civil Service Affairs as a basis. Focus found out how remuneration is currently being formed in the civil service and what will change if this initiative is adopted.

Salary, allowances, bonuses: what does the salary of a civil servant in Ukraine consist of?

Many factors influence the salary of a civil servant, says Ivan Oskolkov, a lawyer in the judicial practice of AVER LEX JSC. In particular, it consists of:

• official salary;
• bonuses for length of service;
• allowances for the rank of a civil servant;
• bonuses (if established).

There are also variable payments - for an honorary title, for an academic degree, and the like. Bonuses and allowances can make a significant difference to your monthly compensation. Thus, the State Secretary of the Cabinet of Ministers, Alexander Yarema, was paid 209 thousand UAH in August, of which the official salary is 27.895 thousand UAH. The rest is extras:

• per rank - 556.52 UAH;
• for length of service - 10.879 thousand UAH;
• for performing particularly important work - UAH 28,173 thousand;
• for working with secret documents - 5.579 thousand UAH.

In addition, vacation pay is 30.903 thousand UAH and financial assistance for vacation is 105.059 thousand UAH.

Salaries of civil servants in similar positions may differ between departments, because each has its own estimate

Often, bonuses in the civil service are used by managers as a tool to reward some subordinates and punish others, says Elena Shcherban, head of the legal department of the Anti-Corruption Center NGO.

“The salaries of civil servants depend on categories: A, B or C. Employees of categories A and B make up approximately 30% of the total, these are high-ranking employees. The majority of the civil service are employees of category B. At the same time, the salary of civil servants of categories A and B is significantly higher than the salary of employees of category B,” explains Elena Voronkova, lawyer at the Law Office of Ivan Khomich.

She also draws attention to the fact that, regardless of the department, the salary of a civil servant is paid unevenly throughout the year. “In the first 2-3 months of the new year, they almost always receive wages calculated from the salary for the position and additional payments for rank and length of service, which in the end, minus taxes, can amount to an amount that is less than the minimum wage,” Voronkova noted. .

Since the maintenance of a government agency is carried out using public funds and is included in the budget for the corresponding year, each department has its own estimate. Therefore, salaries for similar positions may differ between departments.

“If a government agency manages to save money, the consequence may be a reduction in the provision for such a body next year. Therefore, its representatives have a personal interest in using all allocated funds in the corresponding reporting year. So it turns out that someone receives big bonuses, and someone receives the minimum wage, because that’s how the budget is distributed,” added Ivan Oskolkov.

Salaries like in business and lower bonuses: what does draft law No. 8222 provide for?

Draft Law No. 8222 on amendments to the Law “On Civil Service” proposes to raise the prestige of the civil service by equating wages in the sector with those in the business environment. Within five years, it should reach 70% to 90% of the size of similar positions in the private sector. The document also proposes to clearly define the basic and additional parts of a civil servant’s salary and limit bonuses and allowances. Thus, the salary of a civil servant will consist of:

• permanent salary - official salary, bonus for length of service, bonus for the rank of a civil servant, cash assistance paid with the provision of annual basic paid leave;
• variable wages - bonuses based on the results of the annual performance assessment and monthly, quarterly bonuses, compensation for additional workload and for a vacant position.

According to the draft law, fixed remuneration in the civil service will be 70% of salary, and variable remuneration - 30%

“Fixed salary is a fixed payment and the main remuneration of a civil servant, and variable salary depends on the personal contribution of the civil servant to the overall result of the work of the government body, is a reward for proactive work, timely and high-quality completion of tasks and the results of annual evaluation. The constant part should be at least 70% at the individual level of wage payment, and the variable part should not be more than 30%,” noted Andrey Shabelnikov, managing partner of EvrikaLaw JSC.

According to the document, official salaries will be established on the basis of the classification of positions, in accordance with the Catalog of typical civil service positions, taking into account the comparison of the level of remuneration of typical civil service positions with the private sector of Ukraine. This comparison will be carried out annually.

The draft law also proposes to exclude the monthly or quarterly bonus for proper fulfillment of the terms of the civil service contract. And the size of the monthly bonus of a civil servant, according to the bill, is proposed to be limited to 30%, and the quarterly bonus to 90% of his official salary for the time actually worked. At the same time, the amount of the bonus based on the results of the annual performance assessment should not exceed the amount of one official salary, and the total amount of the bonus that a civil servant can receive for the year is limited to 30% of his official salary for the year.

The size of the long-service bonus in the civil service is also reduced from 3% of the official salary for each calendar year of civil service experience to 2% and the maximum amount - from 50% of the official salary to 30%.

Equal rules for all ministries: will the civil service become attractive?

The bill, if adopted, will equalize the remuneration of civil servants of various departments. “The adoption of bill No. 8222 creates a transparent mechanism for remuneration of civil servants, since it clearly establishes the maximum bonus amount for citizens. That is, for performing the same work, civil servants will receive the same bonuses, and not different ones, as now,” Andrei Shabelnikov is convinced.

The introduction of job classification will encourage officials to get a better position, which provides a higher salary.

In addition, he continues, the wage payment mechanism with constant and variable parts will encourage civil servants to conscientiously fulfill their official duties. “The classification of civil servants’ positions will force workers to strive to get a better position, because along with it the size of wages and the growth of the employee’s career as a whole will increase,” says Andrei Shabelnikov.

However, civil servants will no longer have to rely on bonuses. “With regard to bonuses, the situation for civil servants, according to the proposed changes, will become worse than it is now,” says Elena Voronkova. — After all, the size of bonuses will be limited not only in relation to the amount of the official salary for the year, but also for the actual time worked when determining the amount of monthly and quarterly bonuses. This means that if a civil servant gets sick and is not fully at work in a certain month, then he will receive a minimal bonus for that month, if at all, and it will not be possible to compensate for the shortfall in subsequent months.”

In order for the distribution of remuneration within the framework of the new model to occur fairly, it is necessary to develop a methodology for determining the effectiveness of a civil servant, Nikolai Maksimov, lawyer at Law Firm RIYAKO & PARTNERS, is convinced. In his opinion, the success of the reform depends on how it is implemented.

“A lot of similar legislation was adopted before, as well as reform of work in the courts. But in 2016-17, the secretary of the court session began to receive 12-15 thousand UAH, and now 6 thousand UAH per month - this is how the reform was carried out. Although everything was beautifully written,” noted Nikolai Maksimov.

One should not yet expect a significant influx of personnel from business into the civil service, because the amount of remuneration in the civil service is limited by the capabilities of the state budget. And they, as you know, are modest; the lion's share of the estimate is defense spending.

According to draft No. 8222, if an official has not worked for a full month, he can only qualify for a minimum bonus

“The salary amount is formed within the wage fund, depending on the distribution of funds in the state budget for a separate department. Under such circumstances, renaming the components when calculating wages in the proposed form will not significantly affect anything, since there is no difference which component and in what amount to pay extra so that the amounts of wage expenses correspond to those planned in the budget,” Elena Voronkova is convinced.

Therefore, unfortunately, there is no hope yet for reducing corruption in the civil service. “Salaries themselves are not decisive in the fight against corruption, although this is an important factor,” says Elena Shcherban, head of the legal department of the Anti-Corruption Center NGO. “If we take for example the same judge Knyazev, whose salary was about 300 thousand UAH per month, this did not stop him from taking bribes even for legal decisions.”